SUPREME COURT

Dominion, Volume 9, Issue 2724, 20 March 1916, Page 9

SUPREME COURT

DEATH DUTIES ACT, 190?

IMPORTANT DECISION

A reserved judgment of more than ordinary importance was delivered by His Honour Mr. Justice Chapman iu the Supremo Court on Saturday morning in an action taken by the Crown for the recovery of estate duty under tho Death Duties Act of 1009. The claim was made upon ttie executors of Mrs. Jessio Begg, . deceased. At the hearing the SolicitorGeneral (Mr. J. W. Salmond, K.C.), with him Mr. V. R. Meredith, appeared for Hie Crown, while Sir John Fmdlay, Jv.C., with Mm Mr. D. 11. Hoggard, appeared for the defendants. In the action, tho Crown, through the Commissioner of- Stamps, used to recover JJ6BII 15s. 5d., and interest from tho defendants, tho executors of the will or the late Jessie Bcrr, whioli sum (tho Commissioner alleged) was payable as duty in respect of the estate of the testatrix. From this sum, however, allowance was subsequently made for a deduction of ,£309 14s. 9(1., in respect of an amount, which had been paid by the executors. Tho sum claimed was the duty upon a sum of £68,117 13s. 10d.. which was alleged to be the value of some shares, in a company called Charles Begg and Co., Ltd., which the Commissioner asserted form part of the estate of the testatrix as defined by the Death Duties Act, 1909. It was not disputed that the testatrix had effectually distributed theso shares by way of gift among her children, but the argument for the Commissioner was that for the purposes of duty the case came within either paragraph (c) or paragraph ()) of Seotion 5 of the Act. In givine judgment, His Honour first described tho method, as already reported at length, by which Mrs. Begg had long before her death transferred her shares in the company to her children, and he went on to say that he had examined the cases cited and other .cases tending to assist in the interpretation of the Act. "The result of the examination is to satisfy me,"- he said, "that when a gift of property absolute in its ' terms is made it is. incumbent on the Commissioner to show that it is not really absolute, but that, either something has been retained by the donor inconsistent with his or her absolute exclusion from all enjoyment, or. that some regrant or gift or assurance has been made to the donor, or some contract beneficial to the donor has been entered into hav. ing, from the pecuniary point of view, the same effect so far as the donor is conoerned. The Legislature has in tho N most comlprehenslvo terms asked the Court to inquire into tho substance of the transaction, and has empowered it to cost aside all question of form iu order to get at ths substance, with tho object of defeating ingenious devices to evade the Revenue Act. It is. however, plain enough that, to meet all ways of defeating the efforts of tho Legislature as expressed in these Acts, such an enactment as that in question was necessary. It is part of the plaintiff's case in this action that the device adopted by the deceased donor in this case before the Act of 1909 was passed was sufficient unless the facts prove the existence of some such reservation or contract as I have described. Was there, then, in fact, any such thing? If tho annuity of .£SOO that has been referred to has that effect it is because it is something stipulated for hy the deceased or granted to and accepted by her in such forms as to -come within the. very wide expressions uspd bv the Legislature. It seems to me impossible to contend that tho annuity comes within the description unless it was binding upon someone. If it was binding upon the children or any of them, this was because tho grant of it, evidenced by the resolution, was really part.of the same transaction a.s the gift. The circumstance on which the Commissioner relies is that the an. nuity resolution was adopted before tha ■ gift was finally made, and that it therefore became the consideration for tho gift which took effect when the allot* mont was made and tho shares were issued pursuant to it." His Honour dissented from that view, and expressed the belief that Mrs? Begg evinced no actual intention of accepting the annuity. "I have next to consider," he went on to say, "the effect of the document signed by the six children. I cannot say that it really adds anything to the circumstances already set out. It is not a deed; it is not on its face supported by any consideration moviwr from Mrs. Begg. '~ . . Upon the whole evidence I am satisfied that Mrs. Berg from first to last designed making.a voluntary gift, that she did nil that she could be expected to do to refuse'the annuity both before it was granted and afterwards/ and that the attempt to grant it—an' ineffectual attempt so far as .the acts of tho parties at the two meetings and hy signing the pnper were concerned—never entered into her mind as the consideration or any part o? tho consideration for her. gifl. The onlv thing that the So-iijHov-Grr.eral oould point out to tha contrary is that the final allotment was jjvnde after the members of the family present hnd' passed the annuity resolution. That; I hold, has been explained, »nd as-explained i 5 not sufficient to make out the suggestion that there was a reservation or otherwise to support the case." ... Judgment was accordingly given foT defendant, with costs according to scale. CLAIM FOR DAMAGES. Judgment was also given by His Honour Mr. Justice Chapman on legal points argued in the civil action in which Francis Josoph Richard Heath claimed ,£ll7B damages from Charles Prendergast Knight for injuries received in a motorcar accident. Mr. M. Myers appeared for the plaintiff, and Mr. C. P. Skenett, K.C., with hiiri Mr. P. H. Putnam, for the defendant. * The case, which was heard before a jury of twelve, arose out of a collision on October 6, 1915, at the intersection of Courtenay Place and Tarahaki Street, between a motor-cycle ridden by plaintiff and a motor-car driven by defendant. Plaintiff had his right leg broken m two places. The question at issue was as to whether the accident was brought about by the negligence of the' defendant or of the plaintiff. Defendant also urged that at the time of tho accident he was oil the business of tho Defence Department, and a legal question arose on that account. ■ . . Thfl jury returned a verdict in favour of the plaintiff for .£025 general damages, with costs, etc., and subsequently argument took place on the question as to whether the action was in order, in view of the legal defence Taised. His Honour, after* an exhaustive review of tho law on the subject, approved of the action being brought, but considered tho jurv's awaTd was in excess of what it should have been. He reduced the award to .£6OO, and entered judgment for the plaintiff for that amount, with costs according tc scale.

A NEW TRIAL ORDERED. ,

In another n-awrved judgment, His Honour granted the motion l>y the defendant for a new trial in the case of J. I H.viips v. the Wellington Patent Slip Company, Ltd. Tho original claim was for .-8250 damages for injuries sustained W Hvncs while in the employ of the defendant company, and the jury of four returned a verdict for the plaintiff for ,£IOO. Defendant company's motion for a nrw trial was made upon the ground that, tiis verdict was against tho weight of evidence.

Mr. T. Noiu-e appeared last week in support of (he motion, which, was opposed hv Mr. AT. Pony on behalf of the plaintiff.

VALUATION OF LAND. Points of law in connection with the Valuation of Land Act were decided in a reserved judgment delivered by His Honour the Chief Justice (Sir 'Robert Stout) in the Supreme Court on .Saturday morning. The case before tho Court was that of the Valuer-General v. David Brown Howden, the defendant being an owner of proportv in Wakefield Street, Wellington. At'the hearing, Mr. M. Myers appeared for the Valuer-General, while Mr. A. W. Blair appeared for Howdon, inlaresil 1)1 the ease to alao taltea by the Wellington Gas CorABW. (renr*

sonled by Hr. T. Neave), and by an owner mimed Kirkits. (represented by llr. G. Samuel). The matter was brought before His Honour owing to a dispute us to the proper adjustment between the unimproved value and the value for improvements where the objector lias taken advantage of Section ;il of the Act, and the Government is not prepared to acquire the property, oil the basis laid down in t.lio section. The Court \vuh ysked to say whether the reduction of the capital value should be made by reducing unimproved value only, or value of improvements only, or by reducing both values proportionately, Baforii tile Assessment CouTt, the Vainer-General contended that the proper course was to reduce each item pro- 1 porfcionately, and to throw upon tlio objector the onus of satisfying the Court that thefe values were not correct. Tho Chief Justice did not accept this view, but stated that in such cases as the »no before the Court it was the duty of the Assessment Court to ascertain tho true values. Where the objector could show that the Valuer-General and ho himself had agreed upon the value of the improvements that would bo evidence for the Assessment Court, and tile onus would then be on tho Valuer-General to prove that the values were "not as stated. The mattw will accordingly be remitted to the Assessment Court. DISPUTE OVER A LAND SALE. In the action, S. Law and B. S. Law v. F. Staples and G. Lambert, commenced in the Supreme Court 011 Friday last, Ilis Honour the Ciiiief Justice has reserved judgment. Tho action was one arising out of tho purchase of a block of laud near Shannon. Tho plaintiffs purchased the land from Staples, (through an agent), Lambert being associated m tho defence merely as the original owner. It was olaimed by plaintiffs that tho amount of land in grass was not as represented, and that the land would not carry the numbe rof sheep represented. Plaintiffs sought lecission of the contract or in the alternative .£IOOO damages. The defenco claimed that any misrepresentation which may have occurred was innoccnt of intent to mislead, and in fact was not acted upon by plaintiffs in

making the purchase. Judgment as stated, iras reserved.